Most equity indexes retreated from near all-time highs last week, as concerns over inflation and the Covid Delta variant seemed to weigh on the investor mindset. While the S&P 500 (a proxy for large-cap US stocks) was down approximately one percent for the week, other parts of the market sold-off more significantly. Small-cap stocks, for example, lagged their larger peers, losing more than five percent for the week[1].
The energy sector, which roared back to life as the economy came back online as the vaccine rollout progressed, dropped nearly eight percent last week, as well. The sell-off is the result of news that a breakthrough in relations between Saudi Arabia and the United Arab Emirates improves the odds of OPEC increasing oil supply in the near future[2].
Prices & Interest Rates
| Representative Index | Current | Year-End 2020 |
|---|---|---|
| Crude Oil (US WTI) | $71.17 | $48.52 |
| Gold | $1,813 | $1,893 |
| US Dollar | 92.71 | 89.94 |
| 2 Year Treasury | 0.25% | 0.13% |
| 10 Year Treasury | 1.31% | 0.93% |
| 30 Year Treasury | 1.93% | 1.65% |
| Source: Morningstar, YCharts, and US Treasury as of July 17, 2021 |
Asset Class Returns
| Category | Representative Index | YTD 2021 | Full Year 2020 |
|---|---|---|---|
| Global Equity | MSCI All-Country World | 12.3% | 16.3% |
| US Large Cap Equity | S&P 500 | 16.1% | 18.4% |
| US Large Cap Equity | Dow Jones Industrial Average | 14.5% | 9.7% |
| US Small Cap Equity | Russell 2000 | 10.1% | 20.0% |
| Foreign Developed Equity | MSCI EAFE | 8.8% | 7.8% |
| Emerging Market Equity | MSCI Emerging Markets | 5.0% | 18.3% |
| US Fixed Income | Bloomberg Barclays Municipal Bond | 1.8% | 5.2% |
| US Fixed Income | Bloomberg Barclays US Agg Bond | -0.9% | 7.5% |
| Global Fixed Income | Bloomberg Barclays Global Agg. Bond | -2.6% | 9.2% |
| Source: YCharts as of July 17, 2021 |
[1] Source: YCharts
[2] Source: OPEC+ Calls Meeting for Sunday After Progress Toward Deal - Bloomberg
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Past performance may not be representative of future results. All investments are subject to loss. Forecasts regarding the market or economy are subject to a wide range of possible outcomes. The views presented in this market update may prove to be inaccurate for a variety of factors. These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data. Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.